The European Union, after Russia began its invasion of Ukraine in February 2022, drastically limited imports of natural gas from the east, which sharply increased its prices. The increase in bills hit entire societies. To help those affected by the energy crisis, European governments introduced energy subsidies, for example Austria, Germany and Denmark accepted one-off reliefs and subsidies, while the UK, the Czech Republic and Poland pre-capped energy prices. actual payment extra for each kilowatt hour.
Given the diversity of policies, it is necessary to ask what an intervention that effectively supports those most in need should look like. I explored this question together with economists Scott Cominers (Harvard University), Mohammad Akbarpour (Stanford University), and Piotr Dworczak (Northwestern University). When comparing the possible aid programs, we must remember that they will be very expensive – in some countries their value reaches 5%. GDP. Because we spend so much, we need to make sure the money goes to the needy, not the rich who can easily pay their bills. These programs should also encourage energy conservation, as energy supply is limited.
